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The Canadian dollar touches an intraday 1-month low amid a reassessment of global growth outlook

CAD - Canadian Dollar

The USD/CAD pair increased to 1.3520 (weaker Loonie) at 5:00 am EST along with North American equity market weakness as market participants reassess the global growth outlook and the US-china trade war.

According to Bloomberg, 25 analysts surveyed by the financial data vendor see policymakers at the BoC holding rates unchanged when the monetary policy decision is announced at 10 am EST in Ottawa. A few days ago, the BoC commented about low oil prices, slowing growth, and watching an increase in riskier corporate debt. The BoC has also said that risks to the financial system have increased “slightly” over the past year amid growth worries and expanded risk-taking in global markets, while it reiterated its confidence in the country’s ability to handle any shock.

Technically speaking, it is expected that the USD/CAD pair will leave a 1-month trading range that started on April 24th after the BoC announcement in few minutes. At the same time, it is interesting to see that crude oil is trading right at support, which might give the Loonie some strength if it does not break to new lows from March 13th. West Texas crude oil is trading below USD 58.00 this morning.

Key Movers

The Trump administration once again stopped labeling China a currency manipulator on Tuesday, a decision that averts a further escalation in the trade war. The Treasury Department issued its report to Congress, expanding the number of countries whose currency and economic policies are scrutinized to 21 from 12. Five countries, Ireland, Italy, Vietnam, Singapore, and Malaysia, all joined China, Japan, South Korea, and Germany on the watch list. Chinese Foreign Ministry spokesman Lu Kang said, “...the report that China is not a currency manipulator is in line with the common understanding of the international community,”

The Euro slid 0.1 percent and the Kiwi fell 0.4 percent versus the Greenback with a rise in German unemployment and a hacking attack on the Treasury in New Zealand being the main catalysts.

Expected Ranges

USD/CAD: 1.3465 - 1.3520 ▼

EUR/CAD: 1.5027 - 1.5090 ▼

GBP/CAD: 1.7018 - 1.7110 ▼

AUD/CAD: 0.9325 - 0.9355 ▼

NZD/CAD: 0.8777 - 0.8830 ▼